In March 2020, HPCL-Mittal Energy Limited (HMEL) a joint venture between state-run Hindustan Petroleum Corp and steel tycoon L.N. Mittal, became India’s first company to buy cargo from the oil producers of Guyana.
- HMEL bought the 1 million-barrel cargo of Guyana’s Liza light sweet crude which had started its sail on March 2 on Marshall Islands-flagged tanker, Sea Garnet and it is set to arrive around April 8 to India’s Mundra port(Gujarat).
- HMEL operates 226,000 barrels per day(bpd) in the Bathinda refinery which is in the northern state of Punjab.
Background:
- India is the third-biggest oil importer after China and US in the world, speeding up its diversification of imports to cut its dependency on Middle Eastern crudes.
- The Organization of the Petroleum Exporting Countries’ (OPEC) share in India’s oil imports fell to historic lows between April 2020 and January 2021.
- OPEC decided to extend production cuts through April and Saudi commented India to use its strategic crude reserves to cool down prices.
Import from Guyana:
- The crude from Guyana, onboard the Sea Garnet had been originally allocated to New York-based Hess Corp, one of the companies producing crude in Guyana along with Exxon Mobil Corp, and delivered to Trafigura.
- Since 2020 after it began exporting crude, its oil has mainly flowed to the United States, China, Panama and the Caribbean.
Import from Venezuelan oil:
- India was a prominent importer of Venezuelan oil, but tight U.S. sanctions on the South American country have since 2019 limited the volume India can buy.
- India did not receive any Venezuelan crude imports in February but in February 2020, 371,300 barrels per day (bpd) of Venezuelan oil arrived to Indian ports.
Steps taken to overcome the Middle East dependency:
- India began to import Guyanese crude and renewed the supply contract between Indian Oil Corp Ltd and Russia.
- Note – In February 2020 Indian Oil Corporation Limited (IOCL) set up a contract with Russia’s Rosneft Oil Company for importing two million tonnes per annum of Russian crude oil.
- Besides Russia, North American producers Canada, the United States and Mexico also have gained market share by selling heavy crude grades to India.
- India’s Mangalore Refinery and Petrochemicals Ltd has bought its first ever cargo of Brazilian Tupi crude oil, The 1-million-barrel cargo was sold by Royal Dutch Shell will be delivered by May.
Recent Related News:
On February 17, 2021, Prime Minister (PM) Narendra Modi virtually Inaugurated & Laid Foundation Stone for several key projects related to Oil & Gas Sector in Tamil Nadu (TN).
- Inauguration of 143 Km Long Ramanathapuram-Thoothukudi section of Natural Gas Pipeline
- Inauguration of Gasoline Desulphurisation unit at Chennai Petroleum Corporation Limited, Manali, Chennai.
- Laid Foundation stone of Cauvery Basin Refinery at Nagapattinam
About HPCL-Mittal Energy Limited (HMEL):
Establishment – 2007
Chief Executive Officer & Managing Director – Prabh Das
Headquarters – Noida, Uttar Pradesh
About Guyana:
It is a country on the northern mainland of South America
Capital – Georgetown
Currency – Guyanese dollar (GYD)
